Catalogs: Paper or Web?

When the internet first came out in the mid 1990s, companies discovered that catalogs could be put on the web—and they were. But those who spent a fortune creating these stand-alone web catalogs learned a valuable lesson: people did not use them enough to pay the cost of creating them.

What they discovered was that most of the web orders came from people who had the paper catalog in front of them. The web catalog turned out to be an ordering mechanism, not a sales medium.

Why was this so?

Catalogs Have Their Benefits

It appears that a nice looking catalog in the mail is like a magazine. It is interesting to read. You discover what is out there, read about it, and finally decide to buy something. You can carry the catalog around the house, read it while eating, and tear pages out and stick them on your refrigerator. A paper catalog has a shelf life of a few days or weeks.

A web catalog, on the other hand, is a passive device. You can only read it when you are sitting down at a computer. You cannot carry it around your house, or read it while sitting on a sofa watching television. It does not reach out to you and say “read me.” Most people are not even aware that a new web catalog has arrived.

The Web Has Its Benefits, Too

Gradually, catalog users have turned to the web, since they never get put on hold and can place an order at any time of the day or night. Good catalogers use cookies so that the web site can say “Welcome back Susan” and enable her to order with one click—remembering her credit card number and address. This has proved to be much more efficient for the customer than the 800 number where the information has to be read over the phone for every transaction.

One of the weaknesses of the web, however, is that it is difficult for shoppers to browse for products. Granted, if a shopper has a good idea of what they want, they can usually find it quite quickly on a website using search or product navigation. It’s those situations where the shopper is browsing or “just looking” that make traditional web navigation and presentation cumbersome and ineffective. It’s easy for a shopper to flip through a catalog and view hundreds of products across different categories in a matter of minutes. Doing the same on a web catalog takes much longer and can be frustrating. As a result, many catalogers are complimenting their websites with electronic catalogs that emulate the catalog browsing experience including dog-ears and Post-It Notes. Still, it’s not the same brand and experience as the high-quality, paper catalog. That’s another reason why the web is not a great shopping medium for certain products, but a great ordering medium.

Cross Sales Are Crucial

The final nail in the web catalog coffin is cross sales. A good phone salesperson can get a 20% cross sell rate, which means that one out of five people who call up to order one thing are persuaded to buy not just that thing, but something else that they did not intend to buy. To match that rate, websites have to use collaborative filtering, something that Amazon.com is very good at. The software is expensive, but worth it. GUS, the biggest cataloger in the UK increased their cross sell rate from 20% to 40% by using this new software with their phone centers.

What has been most interesting recently is combining a paper catalog with an email. A DoubleClick cataloger did a test of this recently with very positive results. When their millions of paper catalogs were due to be mailed, they selected a group of customers who had provided their emails. They created four groups: People who:

• Received an email before the catalog arrived asking them to look for the catalog and featuring a particular item.
• Received an email timed to arrive exactly with the catalog.
• Received an email timed to arrive the week after the catalog arrived.
• Received no email, but only the catalog, since they were kept as a control group.

Results and Conclusions

In general, the emails boosted catalog sales by almost 20% over sales to the control group. Since the emails were basically almost free, the experiment was highly successful, and will be extended in all future catalog shipments. The three different times for the email dispatch did not seem to have much impact on the results.

The cataloger learned something else: those who used the web to order placed a higher annual dollar volume of sales than those who ordered only over the phone. So the web had two benefits for the company—higher sales and lower costs, saving more than $2 on each web order. Most catalogers have been achieving a 15% web order rate. Some have recently boosted this to as high as 35%. The percentage is growing as more people are using the web, and as catalog web sites are getting better and better.

So what can we conclude from all of this?

• Paper catalogs are here to stay. You cannot have a successful catalog sales operation without them.
• Web catalogs are primarily an ordering mechanism, not a sales medium.
• You should use cookies and one-click ordering on the web.
• Emails calling attention to a paper catalog are highly profitable.
• Collaborative filtering software can boost the cross sale rate in both web sales and call centers.
• While paper catalogs are essential, having a web copy today is worth the effort and will be increasingly profitable in the years ahead.

Arthur Middleton Hughes, vice president of The Database Marketing Institute, has presented 28 seminars on database and email marketing.  Arthur has also authored several books includingStrategic Database Marketing 4^th Edition (McGraw-Hill 2012). He and Andrew Kordek, chief strategist and co-founder of Trendline Interactive, are hosting a two-day Email Strategy Study Group in Fort Lauderdale  March 26-27, 2013, featuring group competition for email marketers responsible for subscriber acquisition, lifetime value, ratings and reviews, boosting their email budget, and doubling their ROI.  To learn how to attend the Study Group,click here.

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